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TUKO.co.ke journalist Japhet Ruto brings over eight years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.
Kenya's debt service costs have surged to surpass the combined expenditure on development and recurrent costs, posing a big threat to the country's revenues.
A report by the National Treasury showed that in the nine months from July 2023 to March 2024, the government spent a whopping KSh 1.24 trillion on debt repayment compared to KSh 1.11 trillion spent on salaries and development projects.
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The huge cost of debt service was attributed to maturing internal and external loans, and the full-year amount on debt was expected to hit KSh 1.86 trillion.
Among the debt set for servicing was the $2 billion Eurobond, set for maturity in June.
"The debt service is anticipated to increase to KSh 1.89 trillion by FY 2026/27. Kenya's debt remains within sustainable limits with a high risk of debt distress for both overall and external debt rating," Treasury Cabinet Secretary Njuguna Ndung'u said in the 2024 Medium Debt Management Strategy.
Treasury revealed that as of September 2023, the national debt stood at KSh 10.58 trillion, marking a 3.82% increase in borrowing within the financial year 2023/24.
The gross public debt comprised KSh 5.66 trillion (53.5%) in external debt and KSh 4.92 trillion (46.5%) in domestic debt.
"Projections indicate a rise in total public debt by end of June 2027, reaching KSh 13.19 trillion," the exchequer stated.
President William Ruto slashed the 2024/2025 FY proposed budget amount to KSh 3.7 billion from KSh 4.2 trillion, saying the country must live within its means.
Treasury expects the 2024/2025 FY budget deficit to be KSh 703 billion, lower than the current financial year's KSh 785 billion.
The deficit will be plugged through an external borrowing of KSh 326.1 billion and a domestic borrowing of KSh 377.7 billion.
Proofreading by Otukho Jackson, a multimedia journalist and copy editor at TUKO.co.ke
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Kenya's Debt Repayment Overtakes Development and Recurrent Expenditure
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